Much has been written about the projected take-over of Cadbury’s by Kraft Foods – the demise of another British manufacturing institution, the possible effect on the brands and jobs. However, taking a step back from the immediate commercial implications, how do the two companies’ brand architecture strategies compare and how could their differences affect the success of the merger?
The Cadbury / Kraft brand architecture question is all the more interesting in that the two companies’ brand architecture styles represent the two ends of the spectrum. Cadbury has the “parent brand” brand architecture model – the Cadbury brand name is present, even if only in a minor role, in all the Cadbury chocolate products, from Chocolate Buttons, to Cadbury’s Dairy Milk tablet, cakes, desserts, drinks and even Cadbury World. Is it as a reflection of the Quaker “caring family” corporate ethos that this brand architecture model of shared brand equity was adopted by Cadbury?
Kraft, on the other hand, is a prime example of the “individual product brand” brand architecture model – where each brand, although possibly with a small brand family of their own, has no visible links in branding and communications with the parent or corporate brand. Kraft’s UK brands – including Toblerone, Ritz crackers and Kenco coffee, have no visible inter-brand links, apart from Kraft Dairylea and Kraft Philadelphia, which have historically had Kraft as part of the logo. With this model, each brand achieves its own success or failure in its own right.
Both models of brand architecture have their own merits and disadvantages and these tend to be most evident in communications. With the parent brand model, communications success for one brand often has “spin-off” benefits for other family members – the “Gorilla” ad being an outstanding example – its legendary popularity had spin-off awareness and sales benefits across the whole Cadbury’s range.
The only flip-side to this benefit would be for the market researchers trying to disentangle the tracking results, relating awareness delivered with a variety of Cadbury’s communications inputs (a challenge, but not impossible!). That’s when the parent brand model gains in the communications arena. But it can also be a ’watch-out’ – back in 2006, a leaking pipe in a Cadbury’s factory in Leominster caused a salmonella scare for eight Cadbury’s countlines. The headlines “Cadbury’s recall – health fears” had an albeit short-term detrimental effect on attitudes beyond just the specific lines involved.
Another communications watch-out for the parent brand model is where the parent brand has the same name as the corporate entity, so activity at a corporate level potentially impacts on the consumer brands. In the recent Kraft takeover, their individual product brand model meant that it was arguably unlikely that the majority of the UK consumers immediately realised Kraft meant Terry’s Chocolate Orange, Toblerone, Kenco or Ritz Crackers as well as Dairylea and Philadelphia.
With the Individual product brand model, the benefits are mainly an absence of possible negatives – no great fear of negative news about a parent or sibling brand affecting them – in 2007, when an ad claim for Dairylea’s Lunchables snack – “packed with good stuff” was declared misleading by the Advertising Standards Authority, this would’ve had little impact on the other Kraft brands in the market.
Both models of brand architecture demand different skills – arguably, the parent brand is the one that requires the most experience – managing a portfolio of hundreds of countlines with the Cadbury’s brand equity on them, appealing to many different audiences, is a bigger task than the management of several discrete brands using the individual product brand model.
It could take a different way of working – for example, greater transparency (any corporate moves will instantly impact on the brand) and a different payback model (communications investments will work across a wider
Depending on how Kraft integrates the two operations, will the parent brand model work within the Individual Brand set-up? It will be fascinating to see whether the two styles of brand architecture can be merged!